With the launch of Maker’s Multi-Collateral Dai upgrade earlier this week, new users should note that the older version of Dai (now called Sai) has been replaced by an enhanced stablecoin that can support multiple collateral types. In this article we’ll touch on:
- How to Migrate Sai to Dai
- How to track migrations
- Why this transition is unique
For those unaware of what Multi-Collateral Dai entails, we encourage you to check out our write-up here. In short, the newly redesigned Oasis Trader will now serve as your one-stop-shop for trading, borrowing and saving Dai.
How to Migrate
Seeing as Sai is currently circulating on a wide number of applications, there are a number of different ways to migrate your Sai to Dai. Generally speaking, we recommend doing it directly through Maker as this ensures all your bases are covered. The process is pretty straight-forward. Simply head over to the migration dashboard, connect your web 3 wallet which is holding Sai and within a few clicks of you’ll instantly be upgraded to Dai!
It’s definitely worth noting that in order to upgrade to Dai, you’ll need to make sure that you closed any old CDPs that may have been accruing a stability fee. As such, there’s definitely a situation where you’ll need to purchase MKR to pay for said fees. In order to quickly purchase MKR, we recommend using Uniswap to transfer assets directly to the wallet that you are holding your Dai.
Beyond Maker, other applications such as InstaDapp and dYdX are incorporating their own migration bridges that will allow you to quickly swap your Sai to Dai without having to leave the platform or close any open positions. Other platforms like Compound will continue to offer Sai as a stand-alone asset, meaning that users will have to take charge and make sure they convert their Sai if they so choose.
Sai to Dai Tracker
Interestingly enough, a large amount of Sai has still yet to be converted into Dai. Thanks to this easy-to-visualize tracker, we can see that at the time of writing, over 88M worth of Sai still needs to be converted to Sai.
While there are many theories as to why this might be the case, it is reassuring to note that in the past week, the amount of Sai being migrated has slowly begun to increase. We theorize that as more exchanges announce support for Dai in favor of Sai, more whales will migrate their holdings as well.
Why Does This Matter?
As we’ve noted throughout our site, DeFi is largely driven by permissionless systems. While this has a number of clear benefits (such as transparency, automation and a lack of rent-seeking), it does pose a situation where Maker can not inherently *force* anyone to migrate their Sai to Dai. As such, it’s likely that Sai will continue to function as a stand-alone asset similar to what we’ve seen with ether ($ETH) and Ethereum Classic ($ETC) today.
As mentioned in a recent report, the closing of CDPs also incurs the burning of MKR. With over 88M in outstanding Sai, it can be assumed that a large portion of SCD stability fees still needs to be paid back. While Maker has made it possible to transfer any debts larger than 20 Sai, this process does force old CDP owners to examine their position and interact with the new system.
In summary, this migration process serves not only as a catalyst for MKR burning but as a pleasant introduction to the enhanced UX of MCD. Moving forward, we expect that many exchanges and applications will bake MCD directly into their systems, providing an intuitive way for an average user to post their digital assets as collateral for a stable, permissionless loan in the form of Dai.
As we’ve stated throughout the course of the past few weeks, MCD poses a huge milestone for Maker and the DeFi community at large. We expect the project to see an increased amount of exposure in the coming months as Dai begins to have a more notable presence in the blockchain ecosystem at large.
For more news on all things DeFi, follow us on Twitter! We’ll be keeping a close eye on Maker along with updates to the ecosystem at large.
Cooper is focused on building compelling blockchain products. He currently works as the managing director at Fitzner Blockchain Consulting and is a contributor to DAOs like MetaCartel and Moloch. He is an active member of the Ethereum community and has a strong interest in for-profit businesses such as The Block Crypto and Messari.